Overview
- Cotality’s Home Value Index rose 0.7% in August — the strongest monthly gain since May 2024 — pushing annual growth to 4.1%.
- Buyer demand is outpacing supply, with advertised listings 20% below average and auction clearance rates hitting 70%, the highest since early 2024.
- Vendors are entering spring in a strong position, with low competition and rising prices across nearly all regions.
Cotality’s national Home Value Index (HVI) rose 0.7% in August, the strongest month on month gain since May last year. The result pushed the annual change higher for the second month in a row, to 4.1%.
The growth cycle has been gradually building momentum since the February rate cut, with buyer demand spurred by a lift in borrowing capacity, real wages growth, rising confidence and what is likely to be a growing sense of urgency as advertised stock levels remain tight.
“Once again we are seeing a clear mismatch between available supply and demonstrated demand placing upwards pressure on housing values”, said Cotality Australia’s research director, Tim Lawless.
“The annual trend in estimated home sales is up two percent on last year and tracking almost 4% above the previous five-year average. At the same time, advertised supply levels remain about -20% below average for this time of the year.”
Vendors are in a strong position as we head into spring.
Auction clearance rates rose to 70% in late August, the highest since February last year, and competition amongst sellers is relatively mild amid such low advertised stock levels.
“We are starting to see the usual start of spring upswing in new listings coming to market, but from a low base,” Mr. Lawless said. “A pick up in the flow of stock coming to market through spring will be good news for buyers who generally have limited choice at the moment,” Mr. Lawless said.
While housing values are rising across most regions, the pace of growth remains modest relative to recent upswings. During the pandemic, the monthly change in the national index peaked at 3.1% in March 2021, and the upswing commencing in early 2023 climbed quite rapidly, reaching a 1.3% high in May 2023.
“I would be surprised if we saw the monthly rate of change in the national HVI getting anywhere near these earlier cyclical peaks, given how stretched housing affordability has become,” Mr. Lawless added.
“What is more likely is that home values will rise at a more sustainable pace, with demand dampened by affordability constraints, more normal rates of population growth and cautious lending policy.
While interest rates are falling, the cash rate is still 350 basis points higher than the 0.1% low that underpinned growth in the pandemic.”
The growth trend remains geographically broad-based with almost every region recording a rise in values over the month. Tasmania remains the exception, with Hobart values down -0.2% over the month.
The mid-sized capitals are once again leading the growth trend, with Brisbane (+1.2%) and Perth (+1.1%) recording the highest monthly gains. Adelaide wasn’t far behind with a 0.9% lift in values.
Darwin has also recorded a solid gain, with a 1.0% rise in August, taking values 10.8% higher through the first eight months of the year, by far the highest year-to-date gain across the capital cities.
“It seems that investors are willing to look through the volatile history of Darwin housing trends, with investors attracted to the low price points and high yields. Lending to this segment has more than doubled over the past year,” Mr. Lawless said. “Additionally, listings are extraordinarily low, down about 50% on the five-year average.”
Download the full September HVI
